The Central Energy Fund (CEF) has asked the Select Committee on Economic and Business Development for legislative support in order for it to make an impact. The Chairperson of the Board of the CEF, Mr Luvo Makasi, said it was crucial that the entity look at diversifying its energy portfolio.
“We are looking at catalysing the local exploration and facilitating the move to natural gas; we are looking at becoming a catalyst to assist entrance to the new area of gas. With the shareholder positioning to lead the transition to clean fuel, we can’t ignore the role of renewables in the economy,” Mr Makasi said.
“We need support to make this impact, some of the changes would require regulatory and policy intervention, but on this we will provide regular feedback. It is a journey that is not comfortable but we are prepared to take it.”
He said the entity was hopeful that it will get PetroSA out of its challenges. The Acting Chairperson of the committee, Mr Eddie Makue, said the committee needed to call the Department of Energy as soon as possible to come and present the review of operations at CEF.
“Well, you need our support, but Members cannot support something unless they have information before them. We are equally concerned about energy as a driver of our economy,” Mr Makue said.
Committee member Magwebu commented that the financial position faced by PetroSA is not one that could be resolved by legislative changes. “The situation is dire, you have lost revenue seriously around 2016. Problems faced by PetroSA today are self-inflicted and have nothing to do with legislative provisions.”
He said the Ikhwezi Project was ill-conceived and that there was no due diligence done when the project was launched in 2014.
“There was no proper research done before you could implement, today you’re sitting with a R9.6 billion liability. But also you paid bonuses to executives involved in this project. You were reckless with the fiscus put into your hands,” he said.
Members also sought clarity on such other issues as the shale gas exploration, fuel prices, the social impact the fund has, the oil reserve stock that was illegally sold, and if anyone had been held accountable, how relations with African countries could assist in the cost of fuel, and the envisaged role CEF wanted to play into the future.
Mr Makasi clarified that on the stock disposals, CEF had filed court papers and that the process was ongoing in terms of law enforcement agencies.
He also revealed that the Minister had made a point that he will visit the continent and SADC member countries to see how they could assist on the matter of fuel cost.
“We are not where we want to be, but work is being done. We should be able to mitigate the losses. PetroSA is keeping us awake,” Mr Makasi said.
Mr Makue urged the board to attend to the interventions that are planned for turning around the entity and that a report is prepared for submission to the committee in mid-July. “We request you to put those on paper, but also indicate what is the timeframe you’re setting for yourselves,” he said.
By Sibongile Maputi
12 June 2018